EU Voters Turn Against Austerity

The US press and newscasts make it appear that Europeans have voted against poor immigrants and foreigners. What they voted against the super-rich, the oligarchy. The “foreigners” being opposed include the United States insisting on drawing NATO into its wars in Libya,Iraq, Syria and Afghanistan – and now, subsidizing Ukraine to confront Russia. The “nationalist” parties voted against the EU constitution written by the oligarchy to favor the banks against labor. It is a neoliberal constitution that prevents governments from running budget deficits of more than 3% of GDP – except of course to bail out banks and bondholders. It centralizes foreign policy in a US- and NATO-appointed bureaucracy of “technocrats.”

The US press characterized Sunday’s May 25 vote opposing this bureaucratic circumventing of democracy as a vote against “democratic Europe.” This is an Orwellian description of what happened.

Already in 2005, France and the Netherlands rejected the EU constitution. The EU’s response was to impose the right-wing Lisbon Treaty by fiat, not permitting any vote on membership. When Greek Prime Minister Papandreou sought a referendum, he was quickly replaced by a technocrat. Likewise in Italy, when Prime Minister Berlesconi sought a referendum, he was quickly removed by an EU “technocrat.”

This is not democracy. It is oligarchic extremism. And yet the anti-EU voters seeking to recover power for their national governments to run budget deficits to lower the unemployment rate below its current 10.5% is called extremist.

The underlying issue on May 25 was whether voters would support more economic austerity and privatization sell-offs. It is obvious that they didn’t.

They also didn’t want a new Cold War with Russia, or yet more contributions to NATO to support US unipolar world. So when the nominally Socialist parties joined with the right-center to support more financial austerity, and centralization of Eurozone policy in the hands of unelected bankers, they suffered a resounding defeat.

Neocons and neoliberal pundits have tried to focus on the “poison” message of the right-wing parties. But the real story is the inability of the left to provide an alternative.

A century ago the socialist, labor and social democratic parties had an economic program. It included progressive taxation, taxation of land and natural resources, and public infrastructure investment so as to prevent monopolies from occurring. This included a public banking system.

Today, the left wing has reversed all these policies. Tony Blair led the British Labour Party to make a right-wing run around the Conservatives, even to the point of privatizing railways and the Public/Private Partnership giveaway to the City of London. In America, Bill Clinton abolished Glass Steagall and deregulated derivatives trade. Then Barak Obama achieved what a Republican president could not have done: He is leading the fight for the Trans-Pacific Partnership to dismantle financial regulation altogether, along with public environmental regulation. He has escalated the Cheney-Bush military policy seeking to grab foreign oil and gas resources, most recently in Ukraine where Secretary of State Kerry’s and Joe Biden’s families have taken a kleptocratic position in that poor country’s gas resources.

So where is the left?

Today’s political situation is much like 1968, when George Wallace – a “southern cracker” – was the only candidate talking about economic policy and urged withdrawal from Vietnam. He was shot.

The vote against what Marine LePen calls “the Brussels Monster” was against the capture of the EU bureaucracy by NATO neocons and neoliberals opening the immigration floodgates to what threatens to be a wave of “Ukrainian plumbers” and other refugees from America’s most recent attempt to tear up a nation Syria-style, Libya-style or Iraq-style. The vote also was against the TTIP, the Transatlantic Trade and Investment Partnership.

But stock markets soared, because the pro-US and pro-austerity parties are still on top, especially in Italy where the right-wing Democrat party won behind Renzi, and Germany’s Christian Democrats in support of Merkel.

So all one can say is that the Euro-Parliament elections provided a dress rehearsal for the national elections coming up. Only a renewed assertion of national governments can oppose the bad pro-austerity EU constitution. If it cannot be rewritten and if the euro cannot be reformed to promote growth instead of austerity, then there is little reason for labor and industry to support it.

Michael Hudson says that the nationalist parties will not challenge austerity in Europe despite widespread discontent with economic policy.

ANTON WORONCZUK, TRNN PRODUCER: Welcome to The Real News Network. I’m Anton Woronczuk in Baltimore. And welcome to another edition of The Michael Hudson Report.

Now joining us is Michael Hudson. Michael Hudson is a distinguished research professor of economics at the University of Missouri-Kansas City. His two newest books are The Bubble and Beyond and Finance Capitalism and Its Discontents.

Thanks for joining us, Michael.

MICHAEL HUDSON, PROF. ECONOMICS, UMKC: Good to be here.

WORONCZUK: So, Michael, let’s talk about the E.U. parliamentary election results. What were the main political issues surrounding the elections? And how did the different parties fare?

HUDSON: The main political issue is that unemployment is over 10.5 percent in Europe. But the European Parliament has no power over the domestic policy that’s dictating austerity. That power is in the hands of the bankers, who are imposing austerity and unemployment. The Euro-Parliament also has no power over foreign policy. That’s in the hands of a NATO-linked bureaucracy.

So the nationalist parties in France, England, Denmark and other countries are saying, wait a minute, we want a real government that can use a central bank to restore employment by running a budget deficit. The European Lisbon Treaty won’t let us do that. We want a government that’s not going to contribute to NATO to go to war in Afghanistan and Libya and Iraq, and now maybe Ukraine. We want to spend this money at home, because we’re in a depression.

Newspapers call this a victory of the right, but the right only got 25 percent overall. So they will simply be cut out of Euro-policy making by the center-right parties in line with the social democrats. So the most important result isn’t so much the rise in the right, but that voters have lost faith in the left, or what still call themselves “Socialist” and “Labour” parties. They’ve become pro-austerity parties whose plan is mainly to cut taxes and pro-privatize public assets to balance government budgets. The result is that throughout Europe there’s been a rejection of these parties that call themselves socialist.

The reason is clear enough. Ever since Tony Blair sort of made a right ring run around Thatcher and out Thatcherized the Conservatives in England,you’ve had “New Labour” doing much what the Clinton-Gore-Obama “New Democrats” have done in the United States. They’ve taken the lead in urging austerity and kindred anti-labor policies.

It’s as if there’s no memory at all of what socialism advocated a century ago – to increase government spending on industry subsidies, and to promote higher living standards by public education, public health and so forth. The once-socialist parties have been co-opted by the right-wing, so there really isn’t any party that’s having an alternative to the current austerity that’s just tearing Europe apart.

The real increase in voting was nonvoters: people voting with their backsides rather than voting for nominal socialists, conservatives or the so-called right-wing. None of these parties have an alternative to the austerity neoliberal neocon economic model that is being operated out of Brussels.

The two parties that do have an alternative did quite well: Syriza in Greece, and Spain’s Podemos (“We Can”) party, which was just created a few months ago and already polled third. Spain’s opposition Socialists failed to unseat the existing right-wing party, because voters obviously found that they don’t really have any alternative program at all. And in Greece, the former governing Socialist Party of Papandreou has now shrunk to near invisibility. Syriza’s success shows that indeed populations do want what traditionally was called a socialist alternative.

WORONCZUK: You said earlier that the E.U. Parliament doesn’t really have any influence over some major national policies, like banking policy and foreign policy. What powers does it have?

HUDSON: Very little. It has the power to say yes; yes, please; and yes, thank you to the bankers and the neoliberals when they insist on more unemployment; when they say, we’ve got to tighten money against inflation, we’ve got to basically squeeze labor, and we’ve got to bail out the banks so that the banks can pay the bondholders. They don’t really have the power to say “No” to any of this, because it’s not really the kind of a parliament that you’d have in a nation state.

A real nation state is defined as controlling the money supply, which the European Parliament doesn’t do, the power to declare war, which the European Parliament has relinquished to NATO, and the power to set taxes. There is no real eurozone tax system. The taxes that are being supported are taxes that fall only on labor–the value added tax and the income tax, and they’re charging labor for the Social Security and the health taxes.

So the fact that the parliament has so little power is what is leading the nationalist parties to say, “Wait a minute, if Europe isn’t going to have these powers, if only nation states have the power to say this, then let’s withdraw from the eurozone and let’s create a nation state that can do what governments are supposed to do – pull us out of the depression, subsidize industry, and make us grow again like we did before the eurozone and the euro came in to being.”

WORONCZUK: Talk about this co-option of the political left by the right-wing parties. How did this happen?

HUDSON: Many people, especially in Italy say, well, the Americans have a National Endowment for Democracy (meaning oligarchy). And the Americans have been subsidizing the most right-wing leaders within the socialist parties. So in England you had TonyBlair saying that the way to get votes for the Labour Party is to move to the center and to out-Thatcher Thatcher, to actually become an anti-labor party. I guess you could say what has happened is a lack of economic theory to counterpoise to the neoliberal theory that imposes austerity, and the theory that giving money to the banks will all trickle down. The socialists becametrickle-down theorists.

When a few socialists have raised their hands and said, wait a minute, maybe we ought to have a referendum on this, they’ve been very quickly removed–for instance, in Greece, when the socialist Papandreou said, Let’shave a referendum on whether to repay all of Greece’s creditors, he was removed within a week. And in Italy, when Berlusconi said, Let’s have an Italian referendum on the euro, he was quickly removed. So there’s a feeling that the eurozone bureaucracy has turned into an oligarchy that’s not democratic it all. You could say that the people who are called anti-democrats and extremists in reality are democratic, because they’re saying, “No” to the oligarchy. They want to protect the democracy from the oligarchic takeover that’s occurred out of Brussels.

WORONCZUK: Do you think the SYRIZA gains in Greece are going to offer a challenge to this, the neoliberal governance, throughout the E.U.?

HUDSON: Yes. To me, that’s the best result of all of this. In practice, in the European Parliament, the fact that the opponents of neoliberalism are only 25 percent means that they’re going to be ignored. The election will have zero effect on what the European Parliament actually does, because they cansay, “We’re in the majority, we don’t have to give you anything at all.” That’s what happened in the Baltics to opponents of neoliberals.

So in terms of actual political policy making, all the SYRIZA victory means is that they can show the people, “Look, we’ve done it here, we can win; now we need a national election, and if youelect us as a national election, we will then stop paying the foreign debts and we’ll try to make the Greek economy grow again so that you don’t have to emigrate in order to find work.”

WORONCZUK: Much of the press coverage of the election results have focused on what’s happened in the U.K. and what’s happened in France, Germany, and Greece. What about theBaltic states? Is anything interesting happening there?

HUDSON: Well, the U.S. coup in Ukraine frightened the Baltic voters. One politician from Latvia told me yesterday that most Latvians didn’t vote, because they weren’t going to vote for austerity. But the pro-austerity newspapers said that Russia is about to invade, and urged Latvians to vote for the neoliberal parties supporting austerity, or else the other parties – especially Harmony Center, which has mostly Russian-speakers – might invite the Russians in. So you had the usual saber-rattling about Russia as a means of supporting the right wing. Harmony Center only got 13% (compared to nearly a third of the last national election vote).

The strategy is like the old McCarthyite mudslinging in the United States, calling everybody who opposes unemployment, neoliberalism and the austerity “communists” – or in this case, pro-Russians. So many Latvians were panicked into supporting the right wing.